What is the minimum charter capital of a life insurance enterprises in Vietnam ?
What is the minimum charter capital of a life insurance enterprises in Vietnam ? - Question from Ms. Thom (HCMC).
What is the minimum charter capital of a life insurance enterprises in Vietnam?
Pursuant to Article 35 of the Decree 46/2023/NĐ-CP stipulating the minimum charter capital of a life insurance enterprises in Vietnam as follows:
Minimum charter capital
1. Minimum charter capital of life insurance enterprises:
a) Life insurance business (except unit-linked insurance, retirement insurance) and health insurance: 750 billion Vietnam dong;
b) Insurance business as prescribed at Point a of this Clause and unit-linked insurance or pension insurance: VND 1,000 billion;
c) Insurance business as prescribed at Point a of this Clause, unit-linked insurance and retirement insurance: VND 1,300 billion.
2. Minimum charter capital of non-life insurance enterprises:
a) Non-life insurance business (except aviation insurance, satellite insurance) and health insurance: 400 billion Vietnam dong;
b) Insurance business as prescribed at Point a of this Clause and aviation insurance or satellite insurance: VND 450 billion;
c) Insurance business as prescribed at Point a of this Clause, aviation insurance and satellite insurance: VND 500 billion.
3. Minimum charter capital of a health insurance enterprise: 400 billion Vietnam dong.
4. Minimum charter capital of reinsurance enterprises:
a) Reinsurance business, non-life reinsurance transfer or both non-life reinsurance and health reinsurance: VND 500 billion;
b) Reinsurance business, life reinsurance concession or both life reinsurance and health reinsurance: VND 900 billion;
c) Trading in reinsurance, accepting reinsurance in all three types of life reinsurance, non-life reinsurance and health reinsurance: VND 1,400 billion.
5. Insurance enterprises, insurance enterprises established, organized and operating before the effective date of this Decree and with a charter capital lower than the minimum charter capital specified in this Article, before the effective date of this Decree. January 1, 2028 must complete the sufficient addition of charter capital and deposit as prescribed.
Thus, the minimum charter capital of a life insurance enterprise is as follows:
- Life insurance business (except unit-linked insurance, retirement insurance) and health insurance must have a minimum charter capital of 750 billion Vietnam dong;
- Life insurance, health insurance and unit-linked insurance or retirement insurance business must have a minimum charter capital of VND 1,000 billion;
- Life insurance, health insurance, unit-linked insurance and retirement insurance business must have a minimum charter capital of 1,300 billion VND.
What is the minimum amount of capital of a foreign non-life insurance enterprise in Vietnam?
Pursuant to Clause 1 Article 36 of the Decree 46/2023/NĐ-CP stipulating the minimum amount of capital of a foreign non-life insurance enterprise in Vietnam as follows:
the minimum capital allocated as follows:
(1) Business of non-life insurance (except for cases of items (1), (2)) and health insurance: 250 billion Vietnam dong;
(2) Business of non-life insurance, health insurance and aviation insurance or satellite insurance: VND 300 billion;
(3) Business of non-life insurance, health insurance, aviation insurance and satellite insurance: 400 billion VND.
Note: Branches of foreign non-life insurers established, organized and operating before the effective date of Decree 46/2023/ND-CP have a capital allocated lower than the minimum amount. According to the above provisions, before January 1, 2028, the capital must be fully supplemented and deposited according to regulations.
How shall an insurer in Vietnam maintain equity during its operation?
Pursuant to Clause 1 Article 37 of the Decree 46/2023/NĐ-CP stipulating as follows:
Equity Management
1. During the course of operation, insurers and reinsurers must maintain equity sources to ensure that the solvency margin of the insurer or reinsurer is higher than the solvency margin of the insurer or reinsurer. minimum payment and meet the following regulations:
a) For insurers and reinsurers licensed before January 1, 2023: Before January 1, 2028, the charter capital and equity capital must not be lower than the legal capital prescribed in Article 10 of Decree 73/2016/ND-CP; from January 1, 2028, the charter capital and owner's equity must not be lower than the minimum charter capital as prescribed in Article 35 of this Decree;
b) For insurance enterprises and reinsurance enterprises that have been licensed since January 1, 2023, the charter capital and owner's equity must not be lower than the minimum charter capital as prescribed in Article 35. this Decree.
2. During the operation process, the foreign branch in Vietnam must maintain the equity source to ensure that the solvency margin of the foreign branch in Vietnam is higher than the minimum solvency margin and meets the meet the following regulations:
a) For foreign branches in Vietnam that have been licensed before January 1, 2023: Before January 1, 2028, the allocated capital and equity are not lower than the legal capital specified in Article 10 of the Decree 73/2016/ND-CP; from January 1, 2028, the allocated capital and equity capital must not be lower than the minimum allocated capital as prescribed in Article 36 of this Decree,
b) For foreign branches in Vietnam that have been licensed since January 1, 2023, the allocated capital and equity are not lower than the minimum allocated capital as prescribed in Article 36 of this Decree.
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Thus, an insurance enterprise must maintain equity capital to ensure its solvency margin is higher than the minimum solvency margin and satisfy the following conditions:
Case 1: The insurance enterprise has been licensed before January 1, 2023: Before January 1, 2028, the charter capital and equity capital must not be lower than the legal capital specified in Article 10 of Decree 73/2016/ND-CP ; from January 1, 2028, the charter capital and owner's equity must not be lower than the minimum charter capital as prescribed in Article 35 of Decree 46/2023/ND-CP;
Case 2: The insurance enterprise has been licensed since January 1, 2023, its charter capital and equity are not lower than the minimum charter capital specified in Article 35 of Decree 46/2023/ND-CP.
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